The Bombay High Court has affirmed that the constitutional right to carry on trade or profession under Article 19(1)(g) cannot be extinguished merely due to procedural delay in filing a GST appeal, even where statutory limitation periods have expired. This ruling reasserts the primacy of fundamental rights over technical compliance failures in tax administration.
Background & Facts
The Dispute
The petitioner, Atlas Steel, a proprietorship business registered under GST with GSTIN 27AKVPM1671L1ZF, had its registration cancelled by the State Tax Officer on 17.08.2022 for non-filing of returns. The petitioner filed an appeal against this cancellation before the Deputy Commissioner (Appeal), which was dismissed on 19.06.2025 on the ground of limitation. The appeal was filed 877 days after the cancellation order, far exceeding the 30-day statutory limit under Section 107(1) of the Maharashtra Goods and Services Tax Act, 2017 (MGST Act). The Deputy Commissioner, lacking power to condone delay beyond 30 days under Section 107(4), rejected the appeal outright.
Key Facts
- GSTIN: 27AKVPM1671L1ZF
- Registration cancelled on: 17.08.2022
- Appeal filed before Deputy Commissioner (Appeal): 19.06.2025
- Delay in filing appeal: 877 days
- Ground of rejection: Limitation under Section 107(1) and (4) of MGST Act
- Petitioner’s business activity: Ongoing commercial operations despite cancellation
- No allegation of fraud, evasion, or wilful default in the record
Procedural History
- 17.08.2022: Order cancelling GST registration issued by State Tax Officer, Aurangabad
- 19.06.2025: Appeal dismissed by Deputy Commissioner (Appeal) on limitation grounds
- 22.01.2022: Date from which petitioner seeks restoration of registration
- 2026: Writ Petition No. 1464 of 2026 filed before Bombay High Court, Aurangabad Bench
- 18.04.2026: Judgment reserved
- 27.04.2026: Judgment pronounced
The Parties' Positions
For the Petitioner
The petitioner argued that the cancellation of GST registration effectively extinguished its legal right to carry on business, violating Article 19(1)(g) of the Constitution. It relied on Rohit Enterprises v. Commissioner State GST and Mafatlal Industries Ltd. v. Union of India to contend that limitation provisions cannot override fundamental rights. The petitioner emphasized that no prejudice was caused to the State, and the only requirement for revival should be compliance with pending obligations.
For the Respondents
The State, represented by the Additional Government Pleader, contended that Section 107(4) of the MGST Act strictly limits the Deputy Commissioner’s power to condone delay to 30 days. It argued that allowing appeals beyond this period would undermine statutory timelines and create administrative chaos. The State maintained that the petitioner’s delay of over two years was inexcusable and that the dismissal was legally sound.
Relief Sought
The petitioner sought:
- Quashing of the order dated 17.08.2022 cancelling GST registration
- Quashing of the order dated 19.06.2025 dismissing the appeal
- Restoration of GST registration w.e.f. 22.01.2022
The Legal Issue
Can the statutory limitation period under Section 107 of the MGST Act be invoked to permanently extinguish a trader’s constitutional right to carry on business under Article 19(1)(g), when no fraud or prejudice to the State is established?
Arguments Presented
For the Petitioner
The petitioner relied on Rohit Enterprises v. Commissioner State GST (2023) to argue that the right to trade is a fundamental constitutional guarantee that cannot be curtailed by procedural lapses. It cited Mafatlal Industries Ltd. v. Union of India (1997) to assert that constitutional courts under Articles 226 and 32 cannot be barred by statutory limitations when fundamental rights are infringed. The petitioner emphasized that the cancellation of registration was not punitive but administrative, and that the State suffered no loss of revenue due to the delay.
For the Respondent
The State contended that the MGST Act is a self-contained code with clear limitation provisions. It argued that Section 107(4) explicitly denies the Deputy Commissioner the power to condone delay beyond 30 days, and that judicial intervention would amount to rewriting the statute. The State maintained that the petitioner had ample opportunity to file the appeal within the stipulated time and that the delay was neither explained nor justified.
The Court's Analysis
The Court examined the tension between statutory limitation and constitutional rights. It observed that while the MGST Act prescribes a 30-day limitation for appeals under Section 107(4), the purpose of such provisions is to ensure finality of proceedings, not to deprive citizens of their fundamental rights.
"The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of shortcomings in the scheme of GST enactment. The right to carry on trade or profession cannot be curtailed contrary to the constitutional guarantee under Art. 19(1)(g) and Article 21 of the Constitution of India."
The Court distinguished between procedural default and substantive injustice. It held that the cancellation of registration was not a penalty but a consequence of non-compliance, and that the State had not demonstrated any prejudice or loss of revenue due to the delay. The Court further relied on Mafatlal Industries, where the Supreme Court held that constitutional remedies under Articles 226 and 32 cannot be fettered by statutory bars.
The Court noted that the petitioner’s business was operational throughout, and the only impediment to compliance was the procedural lapse. It emphasized that the objective of the GST regime is to facilitate trade, not to penalize traders for technical delays, especially where no malafide or evasion is alleged.
The Verdict
The writ petition is allowed. The orders dated 17.08.2022 cancelling the GST registration and 19.06.2025 dismissing the appeal are quashed and set aside. The petitioner’s GST registration (27AKVPM1671L1ZF) is restored w.e.f. 22.01.2022, subject to the condition that the petitioner files all pending GST returns and pays all outstanding dues, including interest, penalty, and late fees, as prescribed under Rule 23(1) of the MGST Rules, 2017.
What This Means For Similar Cases
Constitutional Rights Override Technical Limitations
- Practitioners may now invoke Article 19(1)(g) to challenge GST registration cancellations where delay is unexplained but no fraud or revenue loss is proven
- Courts are likely to prioritize substantive justice over procedural compliance in cases involving livelihood and trade
Restoration Is Conditional on Compliance
- Restoration of registration is not automatic; it is contingent upon clearing all pending liabilities
- Practitioners must advise clients to proactively file returns and pay dues before seeking judicial intervention
Precedent Binding Across Maharashtra
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The Rohit Enterprises precedent is now binding on all benches of the Bombay High Court
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Lower authorities must recognize that limitation under Section 107(4) cannot be used as a permanent bar to revival where fundamental rights are engaged
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Always document business continuity during registration cancellation
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File appeals within 30 days where possible, but if delayed, prepare to argue constitutional grounds
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Do not assume cancellation is final - judicial remedy remains open under Article 226
